Why Waiting to File Your Taxes May Net You More COVID Relief|
Reading Time: 2 minutes
It’s that time of year again: tax season. The 2021 filing season officially began on Friday, February 12, amid continued uncertainty about the pandemic and its impact on all of us. While most accounting firms urge clients to file their tax returns as soon as possible to get a quick refund, this year you may want to wait before pushing that eFile button. Here’s why.
New stimulus policy is still up in the air
Congress is still trying to work out the specifics of a new COVID-19 relief package, though some details are emerging. A draft of the relief bill calls for $1,400 payments for individuals earning $75,000 per year or married couples earning $150,000 per year, plus an additional $1,400 per dependent.
The payments will be based on either 2019 or 2020 tax return income information. The relief payments will phase out completely for single filers making $100,000 per year or joint filers making $200,000 per year. This means taxpayers who earned more money in 2020 than in 2019 might receive larger relief checks if they wait to file their tax returns until after they receive their relief payments.
People who made less money in 2020 than the prior year will benefit from filing their returns early — especially if their 2019 income put them over the phase-out amounts.
The bottom line
To file now or to file later…that is the question.
Your unique, personal situation will drive your decision to file early or wait until the COVID-19 relief payments have been issued. Fortunately, your Aprio tax advisor is here to help. We can guide you through the process of determining the best time to file your income taxes so you receive the maximum overall benefit from both your tax refund and relief payment.
Not only does our team bring tax knowledge and expertise to the table, but we also have a team of experts dedicated to helping clients navigate the nuances of the COVID-19 government relief programs. Aside from offering our expertise, we also write frequent educational articles and host webinars on the latest stimulus policy changes you should know.
To learn more about how we can help you navigate this year’s return, or find out how you can receive more information related to COVID-19 relief, please contact our team today.